Feb 17, Colombo: The European Commission Wednesday listed Sri Lanka among 23 countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks.
In February 2017, FATF identified Sri Lanka as a jurisdiction having strategic Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) deficiencies for which Sri Lanka has developed an action plan with FATF.
The Commission reviewed the latest available information received in this context from FATF relating to these deficiencies and other relevant information.
Following the review of the available information from FATF and from other relevant sources, the Commission's analysis has concluded that Sri Lanka presents strategic deficiencies in the following areas:
(1) Inadequate risk-based supervision of high-risk DNF business and professions, in particular due to lack of prompt and dissuasive enforcement actions and sanctions;
(2) Lack of demonstrating effective implementation of its targeted financial sanctions obligations related to proliferation financing.
"While Sri Lanka has taken steps towards improving its AML/CFT regime notably with regard to competent authorities access to beneficial ownership information, amendments to the requirements on CDD obligations and targeted financial sanctions implementing relevant UNSCRs related to Iran, FATF has yet to conduct an on-site visit to confirm whether the process of implementing the required reforms and actions is being sustained," the European Commission said.
Consequently the Commission does not yet have in its possession information which would enable it to confirm that the strategic deficiencies in these fields were effectively addressed. On this basis, Sri Lanka is considered as a country having strategic deficiencies in its AML/CFT regime under Article 9 of Directive (EU).
The objective of the list of high-risk third countries is to protect the integrity of the European Union financial system and internal market through the application of enhanced due diligence measures by obliged entities when they have a business relationship involving high-risk third countries.
Following review of the available information from FATF and from other relevant sources, the Commission's analysis has concluded that 12 jurisdictions present strategic deficiencies. Those jurisdictions are: The Bahamas, Botswana, Ethiopia, Ghana, Iran, Democratic People's Republic of Korea, Pakistan, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, and Yemen.